Overhill Farms settles merger litigation

LOS ANGELES – Overhill Farms Inc. announced it has entered into a memorandum of understanding to settle a class-action lawsuit related to a proposed merger with Bellisio Foods Inc. The settlement will be subject to customary conditions, including court approval.

Minneapolis, Minn.-based Bellisio Foods announced the proposed acquisition of Los Angeles-based Overhill Farms Inc. in May. Under the merger, Overhill Farms would become a wholly-owned subsidiary of Bellisio Foods. The transaction is valued at about $80.9 million.

Plaintiffs filed the lawsuits between May 17 and May 21, according to a proxy statement filed with the Securities and Exchange Commission. Two were filed with the Superior Court of California, and two others were filed with the District Court in Clark County, Nev.

"The lawsuits generally allege that Overhill’s directors breached their fiduciary duties by engaging in a flawed sales process, by approving an inadequate price, and by agreeing to provisions that would allegedly preclude another interested buyer from making a financially superior proposal to acquire Overhill," according to the proxy statement. The plaintiffs were seeking an injunction against the merger, damages and attorney's fees. Overhill said the lawsuits were without merit.

Bellisio Foods is the third-largest producer of frozen entrées in the United States. Overhill Farms is a value-added supplier of branded and private-label frozen foods for the retail and foodservice markets under such brands as Boston Market. Its customers include Panda Restaurant Group Inc., Jenny Craig Inc., Safeway Inc., Target Corporation, Pinnacle Foods Group LLC, and American Airlines Inc. among others.